This was in 2009, and I don't know what the exact breaks are now. 

The one thing for me that makes or breaks a 1 bed property is the washer and dryer situation.

For example: My fridge breaks and my tenant calls me up and lets me know.

I've always had an entrepreneurial spirit and I find the idea of that career exciting, mostly because it's up to me to either make or break my own success. 

Currently here in Austin it's really easy to cashflow these properties; of course it won't last forever, but even if my rental income cuts in half (I don't expect anything nearly that drastic), I'll still be able to break even, at least.

If they had been your tenant for many years with good payment record, you might consider "giving them some slack" for now; if relatively new, you have no history with them to justify cutting them a break.

(I knew from going and watching the previous tax auction that any property not bid on would be re--auctioned at 2pm the same afternoon with minimum starting bids of $300)  I went out during the break and checked the properties that were remaining. 

Make sure he knows that you are already giving him a break on the reduction only asking for 4k instead of 6k and that they are code and safety issues you're talking about which will be faced by every buyer and may prevent banks lending on the property due to current code/safety issues.There is always another deal, don't give away money on valid issues just to get the deal.

A couple days ago I took a break from reading to put some quality time into writing (at least the first draft) my business plan (basically where I intentionally stopped, a couple days ago). 

But ultimately got cold feet seeing how things were going and took an extended break to pursue other interests.